Last Friday, the Baucus (Senate Finance) Committee debated the large variation in premiums that health plans participating in the health insurance exchanges could charge based on age. (Thanks to Michael G who alerted me to this.) The bill currently allows the health plan's premium to vary by a ratio of 4 to 1 between the youngest and the oldest. That's a reduction from the 5 to 1 in the original proposal. (So, for example, if a 25-year old is charged $2000 per year, the 64-year-old would be charged $8000 in premium.) I've already argued (in my Sept 15 post) that this high ratio is not good.
On Friday, Sen. Kerry introduced an amendment to reduce the maximum ratio to 2-1. Both Kerry and Wyden were eloquent about the issue. (If you're a health policy junky, you can hear the entire hearing on C-span, Friday 28).
Kerry ultimately withdrew his amendment, but he promised that it would come up later in the final debate on the Senate Floor. We should watch this issue. The fairness of health reform rests on three things: the premium subsidies for lower-income people; the size of the penalty for those who refuse to buy insurance; and the extent of age-rating variation allowed. So, this is an important aspect of any plan that's put forward.
Sep 30, 2009
Who says Canada's health system is better?
My friend George S, for one. Of course, the last time George lived in Canada he was young-- I won't say how many years ago that was, but twern't yesterday. George believes in a single-payer system, and though he is otherwise the brightest and wisest, I can't seem to get through to him on this issue. He just loves the health care he received from the province of Ontario. T.R. Reid, who just authored a book on health care systems around the world, seems to agree with George. He must be young, too! To see & hear to his lecture on how bad US health care is and how good Canada is, click here.
Now comes an article in the LA Times ("In Canada...") about the problems that Canadians have in getting access to care in Canada. At issue is whether Canadian physicians can offer care outside the province-run health care system. The article gives examples of long wait times for such things as hip replacements (ooh, that one hits too close to home) or MRIs in British Columbia.
True to my research roots, I checked this out with friend Maria, who lives in BC and knows a lot about the health care system there. "Is this for real?" I asked via email? Here's her answer:
Now comes an article in the LA Times ("In Canada...") about the problems that Canadians have in getting access to care in Canada. At issue is whether Canadian physicians can offer care outside the province-run health care system. The article gives examples of long wait times for such things as hip replacements (ooh, that one hits too close to home) or MRIs in British Columbia.
True to my research roots, I checked this out with friend Maria, who lives in BC and knows a lot about the health care system there. "Is this for real?" I asked via email? Here's her answer:
- "There are significant waits here for elective surgery and the situation with imaging is really quite bad. Interestingly, there is a private system for MRI's, so if you don't want to wait up to a year for one, you can legally get one privately (at about $800). Some people also opt for private cataract surgeries and this is done somehow legally. The current government in BC is "Liberal" but is curbing services in the face of budget deficits.
As a true Canadian, Maria remains optimistic and trusting:
- "Efforts are being made to reduce these wait times and despite the system's shortcomings, it is in my humble opinion a better one than exists in the US."
So, next time George wants to argue with me about single payer, I'm prepared with facts that will matter to him now that he's no longer one of those "young invincibles."
Sep 24, 2009
Baucus Bill Changes as of Sept 22- new summary
Here's a link to the summary of the Revised Chairman's Mark for Senator Baucus' Finance Committee Bill. Over 500 amendments have been submitted. Those are beyond me to keep up with, but reading the Summary of how Baucus has changed things so far should help us keep track of where we are on the "affordability" issue. And, we should be explaining to people how very de-stabilizing will be the very big range of variation in premiums (by age and region) allowed in this bill. It simply won't work if older (55-64) people can't afford health insurance. The young NEED to subsidize the older to some extent. Furthermore, if Wyden's idea that the health exchanges should gradually replace employer sponsored health insurance, then American industry will be more competitive & the young would have more job opportunities and better wages. Without a reduction in the premium ratios, the whole scheme won't work, and the benefits to the young in the form of jobs won't come about either!
Sep 22, 2009
Cash for Clunkers cost us (taxpayers) $2000/car
Here's a great AND READABLE article in an electronic economics journal--The Economist's Voice--about the net costs to our society of the cash-for-clunkers program. By two University of Delaware economists. Net, it cost us about $1 billion extra...small change? One quote from this article is worth the whole thing: "Concentrated benefits create vocal advocates while diffused costs produce silent apathetic opponents."
Sep 21, 2009
Good news on H1N1 Vaccine Front-No adjuvant
I've been wondering what the fast-track approval of H1N1 vaccines would mean for vaccine safety. Today, Andrew Pollack's article in the NY Times, "Benefit and Doubt in Vaccine Addititve," assured me that USA isn't planning to approve any vaccines with adjuvants this go-round. That means the safety concerns associated with fast-tracking the approval aren't an issue. Only question now is whether the vaccine will arrive before the flu itself does.
Sep 17, 2009
An amendment to Baucus bill worth considering..
Sen. Ron Wyden (D-Oregon) wrote a great piece in today's NY Times arguing for a change in the Baucus bill. It would go a long way toward making health insurance work for everyone, and putting us all on an equal footing when it comes to having access to coverage.
The Baucus bill is pretty good, except for the wide variation in premiums that would be allowed on the basis of age. See my previous post for a description of the problems there. Wyden's amendment wouldn't work if such wide deviations survive in the Baucus bill, because only the young would leave employer plans for the Health Exchange, and companies would find themselves paying more for their own plans. They would soon dump their own plans, leaving older workers to buy on the exchange and pay high premiums while getting only an average subsidy from the employer. (Employer plans do NOT vary benefits by age of worker, so they would not give higher subsidies to older workers trying to buy a plan in the health exchange.
The Baucus bill is pretty good, except for the wide variation in premiums that would be allowed on the basis of age. See my previous post for a description of the problems there. Wyden's amendment wouldn't work if such wide deviations survive in the Baucus bill, because only the young would leave employer plans for the Health Exchange, and companies would find themselves paying more for their own plans. They would soon dump their own plans, leaving older workers to buy on the exchange and pay high premiums while getting only an average subsidy from the employer. (Employer plans do NOT vary benefits by age of worker, so they would not give higher subsidies to older workers trying to buy a plan in the health exchange.
The Baucus Bill isn't that bad.
Here is the link to the Senate Finance Committee's "Chairman's Mark", released yesterday and supposedly the starting point for the compromise bill that will be acceptable to a wider range of congress.
All in all, I think it is a good framework for reform, except for a couple of things. The most important problem is that it allows private plans to charge very different amounts to different populations of people. If you're, say, 60-65 years old (too young for Medicare and too old to train for a new lucrative career), you'll have to pay a LOT for health care coverage (5 times more than for younger people). Say you're a single person 60 years of age making $50K a year. You'd be excused from the requirement of either having to buy insurance or pay a fine to IRS only if the lowest premium available to you was more than $5000. (You wouldn't be eligible for a tax credit to help defray the cost, because you'd be too rich.)
That's simply too much for most people I know, and because the 60-65 year olds will shoulder the greatest premiums, it basically says fuggedabout relief. You'll just be penalized if you don't buy coverage, and you still won't be able to afford coverage.
Let's get real. We need to provide a fair insurance system for people who can't get it through the workplace. Those same people must have incentives to be frugal about how they use their covered care. A system of COMPETING regulated health plans offering benefits with a standardized value is the best way to change the health care system to be more efficient in the delivery of care. Nothing is ever perfect, but consumers can vote with their feet by changing plans when they find one or the other not meeting their needs.
I started working on health care issues in 1971. Over the years, I would ask physicians, nurses, and other health care professionals with whom I worked on committees and panels to estimate, off the top of their heads, what percent of health care costs is wasted. It varied, but the most frequent response throughout the years was 40%. (20% also was suggested a lot.) And, it didn't get any lower as I got older.
Right now the system isn't organized to capture those savings. As patients, we all know the problems. Duplicative tests, doctors not communicating, incentives to test and prescribe too much, etc., etc. To change things in the culture of medicine, you need to change the organization of medical care. My two years working at the Mayo Clinic in Minnesota in the mid 1990's taught me that medical culture is very important, and that the organization needs to have incentives to make their practitioners change behavior.
Mayo was organized better than any system I've ever seen. They were most efficient in the conduct of individual services (xrays, lab tests, visits, etc), but they provided a very intensive set of services. Mayo is still paid largely on a fee-for-service basis. Imagine the innovation that would be forthcoming if the majority of its patients signed up as HMO members in the "Mayo Clinic HMO." Mayo would be a leader in deciding if and when services were justified on medical grounds (let alone costs). Under a competing system, Mayo might have incentives to build its HMO into an offering for most people in southern Minnesota.
So, we need the Baucus framework, with some tweaks, but we need to have the young subsidize the old (young-old, non-Medicare). The young will be old someday too. Keeping the young in the pool with the old will keep premiums more affordable to those most vulnerable. The 50+ crowd who start succumbing to chronic and debilitating disease.
If you agree or not, you can find out how to contact your congressman or senator in my recent post, How to Contact Your Congressman or Senator. They need to hear from you. Here's a good news article that shows how important your voice can be on this particular issue.
All in all, I think it is a good framework for reform, except for a couple of things. The most important problem is that it allows private plans to charge very different amounts to different populations of people. If you're, say, 60-65 years old (too young for Medicare and too old to train for a new lucrative career), you'll have to pay a LOT for health care coverage (5 times more than for younger people). Say you're a single person 60 years of age making $50K a year. You'd be excused from the requirement of either having to buy insurance or pay a fine to IRS only if the lowest premium available to you was more than $5000. (You wouldn't be eligible for a tax credit to help defray the cost, because you'd be too rich.)
That's simply too much for most people I know, and because the 60-65 year olds will shoulder the greatest premiums, it basically says fuggedabout relief. You'll just be penalized if you don't buy coverage, and you still won't be able to afford coverage.
Let's get real. We need to provide a fair insurance system for people who can't get it through the workplace. Those same people must have incentives to be frugal about how they use their covered care. A system of COMPETING regulated health plans offering benefits with a standardized value is the best way to change the health care system to be more efficient in the delivery of care. Nothing is ever perfect, but consumers can vote with their feet by changing plans when they find one or the other not meeting their needs.
I started working on health care issues in 1971. Over the years, I would ask physicians, nurses, and other health care professionals with whom I worked on committees and panels to estimate, off the top of their heads, what percent of health care costs is wasted. It varied, but the most frequent response throughout the years was 40%. (20% also was suggested a lot.) And, it didn't get any lower as I got older.
Right now the system isn't organized to capture those savings. As patients, we all know the problems. Duplicative tests, doctors not communicating, incentives to test and prescribe too much, etc., etc. To change things in the culture of medicine, you need to change the organization of medical care. My two years working at the Mayo Clinic in Minnesota in the mid 1990's taught me that medical culture is very important, and that the organization needs to have incentives to make their practitioners change behavior.
Mayo was organized better than any system I've ever seen. They were most efficient in the conduct of individual services (xrays, lab tests, visits, etc), but they provided a very intensive set of services. Mayo is still paid largely on a fee-for-service basis. Imagine the innovation that would be forthcoming if the majority of its patients signed up as HMO members in the "Mayo Clinic HMO." Mayo would be a leader in deciding if and when services were justified on medical grounds (let alone costs). Under a competing system, Mayo might have incentives to build its HMO into an offering for most people in southern Minnesota.
So, we need the Baucus framework, with some tweaks, but we need to have the young subsidize the old (young-old, non-Medicare). The young will be old someday too. Keeping the young in the pool with the old will keep premiums more affordable to those most vulnerable. The 50+ crowd who start succumbing to chronic and debilitating disease.
If you agree or not, you can find out how to contact your congressman or senator in my recent post, How to Contact Your Congressman or Senator. They need to hear from you. Here's a good news article that shows how important your voice can be on this particular issue.
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